UK-listed water treatment and monitoring business Modern Water, an IP Group portfolio company, is to merge with Integumen in a deal valuing its stock at around $21.3m.
Human skin model producer Integumen has agreed an all-share deal to acquire Modern Water, a UK-listed membrane water monitor producer backed by commercialisation firm IP Group.
The deal is expected to follow a stock consolidation to be put to Integumen’s investors in September 2020 enabling Modern Waters to exchange 10 shares for one new Integumen share.
Integumen’s offer values Modern Water’s total share capital at about $21.3m, equating to approximately $0.54 per share. It implies that Modern Water shareholders should receive 52.5 million new shares if the stock consolidation is successful.
Modern Water’s investors would own a total 32% shareholding in the merged company, however the consideration would be reduced if a dividend is paid subsequent to Integumen’s bid becoming unconditional.
Founded in 2006, Modern Water supplies water treatment membranes and related products to help monitor toxicity, metals and contaminants in water, soil, food and industrial materials.
The company’s core approach exploits bioluminescence emitted by marine particles in conjunction with electroanalytical processes and immunoassays that measure the concentration of specific molecules.
Integumen’s artificial intelligence-equipped human skin model technology can also be used for water contamination testing. It claims that demand has increased as waterways look to monitor pathogens during the coronavirus pandemic.
Gerald Brandon, chief executive of Integumen, also currently acts as non-executive chairman of Modern Water.
The company has been producing reagents for Modern Water’ having inked a strategic partnership in March 2020, and believes the merger will unlock synergies across several technological, logistical and customer-related frontiers.
Integumen plans to enhance Modern Water’s equipment with real-time water monitoring, communications and AI-related capabilities. It will also leverage the latter’s China and US-based offices to provide market access for its skincare range, which had been subject to lockdown-driven restrictions.
Modern Water went public on the Aim stock exchange in a $59.2m initial public offering in 2007 which valued the company at around $138m.
IP Group owned approximately 13.5 million ordinary shares in Modern Water at the time of the IPO, equating to 23% of the latter’s issued share capital.
